Moscow, November 22, 2004 —The IFC Technical
Working Group on Securitization outlined legal and tax obstacles to developing
a securitization market in Russia, and recommendations for removing those
obstacles, at a workshop in Moscow. The workshop was organized and hosted
by the State Duma (lower chamber of the Russian Parliament) representative
Anatoly Aksakov, Deputy Chairman of the State Duma Credit Institutions
and Financial Markets Committee. It was held for members of the Russian
Approximately 40 bankers attended the meeting. Vladimir Gusakov,
Deputy Head of the Federal Service for Financial Markets (FSFM), Russia’s
key financial sector regulator, also attended. FSFM will draft the
proposed enabling legislation for Russian securitization. It has
drawn on the Working Group’s recommendations in determining what legislative
changes are needed and plans to consult with the Working Group during the
The workshop was one of several meetings held to date between the government
and Working Group since the Group prepared its Position Paper on securitization
in the Spring of 2004.
The need for securitization is growing in Russia, particularly for mortgage
and consumer loans. Both are projected to grow rapidly in the coming years.
“The ability to securitize these loans will help Russian banks meet
rising credit demand, and maintain affordable interest rates. It also will
provide banks with long term, local currency funding so they can make long
term mortgages without taking on interest rate risk” said Alison Harwood,
IFC’s Principal Securities Market Specialist. “Other firms with
assets and receivables to securitize will also benefit from greater access
to bond financing.”
“Increasing the availability and affordability of housing finance, and
access to securitization as a tool to support this objective, is central
to IFC’s financial markets program in Russia, “ said Edward Nassim, IFC’s
Director for Central and Eastern Europe. IFC is helping build Russia’s
primary housing finance market, including providing $235 million
in loans to three Russian banks to build their mortgage portfolios. IFC
currently is preparing a large-scale technical assistance project to strengthen
the skills and capabilities of mortgage lenders, create standardized mortgage
products and documentation and improve the legal environment. Earlier,
IFC advised the government on the Mortgage Backed Securities Law.
The Working Group evolved from IFC’s Conference on “Securitization in
Russia: Challenges and Opportunities” held in Moscow in December 2002.
It includes representatives from the Moscow offices of law firms
(Baker and McKenzie, White and Case), Standard and Poors, accounting firms
(Finamatics, PriceWaterhouseCoopers), banks (Alfa Bank, Russian Standard
Bank, Sberbank) and the State Duma and Central Bank. IFC hired
the global firm Freshfields Bruckhaus Deringer to advise the group given
its extensive international experience with securitization. The Working
Group has been funded by the UK Department of Trade and Industry Trust
Fund and IFC’s Trust Fund.
International Finance Corporation (www.ifc.org).
Russia joined IFC in 1993. Since then through the end of June, 2004, IFC
has committed $1.8 billion, including $210 million in syndicated loans,
to finance 91 projects in Russia across a variety of sectors, including
banking, leasing, housing finance, infrastructure, mining, agribusiness,
pulp and paper, construction materials, oil and gas, telecommunications,
information technologies, retail, and health care.
The International Finance Corporation is a member of the World Bank Group.
IFC’s mission is to promote sustainable private sector investment in transition
economies, helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the emerging markets, mobilizes capital in
the international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY04, IFC has committed
more than $44 billion of its own funds and arranged $23 billion in syndications
for 3,143 companies in 140 developing countries. IFC’s worldwide committed
portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion
held for participants in loan syndications.